Benefits of statements of cash flows Flashcards

1
Q

Benefits? (3)

A

Help shareholders assess cash position of biz
Shows where cash comes from and where spent
Provide info not on income statement or sofp

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2
Q

What is the importance of liquidity? (3)

A

Cash is essential to short-term survival
Liquidity could affect the level of dividends
May indicate whether they can afford expansion

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